The new law expands upon a previous ordinance that Airbnb itself helped initially draft. The earlier law went into effect in February 2015—it defined and began to regulate short-term rentals, requiring them to have registration numbers. The additional legislation, set to take effect in late July 2016, now requires that listings on sites like Airbnb clearly publish this new registration number and holds both the host and the "platform" (Airbnb) potentially civilly and criminally liable for non-compliance.

In its civil complaint, Airbnb argues that it should not be found liable under the new ordinance, as it is exempt under federal statute. Specifically, Airbnb says that it is protected under Section 230 of the Communications Decency Act—the famed law that protects "computer service" providers from being found liable for speech made by its users.

Rather than targeting the company, Airbnb argues that it should go after users instead. Indeed, the lawsuit cites the city’s own figures: San Francisco has previously collected nearly $680,000 in fines as of February 2016.

Section 230

Further Reading

As Ars has reported previously, Section 230 of the CDA states quite clearly:

No provider or user of an interactive computer service shall be held liable on account of—

(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected.

One of the primary benefits of this portion of the law, experts say, is that it has allowed all kinds of new websites and services to flourish without being worried about being sued for libel or allegedly violating other laws. According to the Electronic Frontier Foundation, Section 230 has enabled all kinds of modern websites, including Craigslist, Yelp, Facebook, and more. In short, Airbnb and many others have argued, such lawsuits should be brought against the relevant speakers or authors, rather than against the publishers.

Second, the Ordinance requires Airbnb to verify content associated with a third-party rental advertisement prior to publishing that advertisement. Specifically, Airbnb must verify the existence of a registration number, which hosts are required under the Ordinance to include on their listings. The act of verifying content associated with a third-party listing is a protected editorial act, and this verification requirement derives from Airbnb’s status as a publisher or speaker of third-party content, in violation of the CDA.

Fightin' words

San Francisco, like many cities nationwide, is worried that if some homes and apartments are effectively turned into quasi-hotels that existing housing stock will be depleted, thereby driving up rents and property values. Already, San Francisco has one of the highest median rents (a one bedroom goes for about $3,600) in the country.

Andrea Guzman, a spokeswoman for the city attorney’s office, told Ars in an e-mailed statement that the CDA doesn’t apply here, and she suggested that the city would fight the lawsuit.

"Nothing in San Francisco's pending ordinance punishes hosting platforms for their users' content," she wrote. "In fact, it's not regulating user content at all—it's regulating the business activity of the hosting platform itself."

She continued: "I'm aware that some advocates for tourist rental platforms contend that local laws like San Francisco's somehow violate the CDA. But I also know that litigation and litigation threats are typical of the positioning done by those who were unsuccessful in the legislative process."

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is due out in May 2018 from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar